Italy’s new government will further reduce the number of F-35s it plans to buy, but will not pull out of the program, according to Prime Minister Matteo Renzi. (USAF photo)

PARIS --- Three weeks after taking office, the new Italian government of Prime Minister Matteo Renzi has decided to reduce defense spending by at least 1 billion euros per year, and will reduce the number of F-35 fighters it buys.

Renzi told TG5 television news on March 16 that “the [F-35] program will continue, but it will be revised,” implying that the number of aircraft will be reduced. “Minister Pinotti is right to say that we will save a lot of money on defense – about 3 billion euros over the next 3 years. Not all on the F-35….but let me be clear: we will continue our international programs, we will continue with a strong air force, but the program will be revised” downwards.

Earlier on March 16, incoming Defense Minister Senator Roberta Pinotti said in a separate interview with Sky News that “regarding the F-35, it is legitimate to think that it could be re-thought, it could be cut or it could be reviewed.” This was the first time a government minister has mentioned the possibility of further cuts or even a cancellation of Italy’s participation in the F-35 program.

“I understand that everyone is wondering about financing the F-35, because in our collective imagination it’s a fighter-bomber, and that means an aircraft used for aggression,” Pinotti continued, adding that “there is a commitment by the government [to review defense plans] so let’s wait until the end before we take a decision.”

Initially due to buy 131 fighters, Italy has already reduced its planned offtake to 90 because of financial constraints, but Renzi’s new coalition government, which took office on Feb. 19, plans a wide-ranging defense review that could further cut F-35 procurement. Renzi’s party, the reformed leftist Partito Democratico (PD), of which Pinotti also is a member, has in the past often criticized the F-35’s cost, and questioned whether it is suited to Italy’s needs.

A PD party resolution last year called for pulling out of the F-35 program, and using its budget to complete development of the four-nation Eurofighter Typhoon, of which Italy holds a 21% share, and buy it instead of the F-35. Crucially, one of the reasons is that Eurofighter guarantees a proportional return on investments, while the F-35 does not, and Italian parliamentarians prefer to finance jobs in Italy rather than in the United States or elsewhere.

“It’s like waiting for a bus – the more you’ve waited, the less likely you are to give up and walk,” one source said to describe why Italy is unlikely to pull out at this late state.

The PD’s mooted solution – develop the far more capable Eurofighter to final Tranche 3B capability and buy it instead of the F-35, thereby supporting Italian jobs – is likely to prove unrealistic as further development of the Eurofighter would require the agreement of the other three partners – Britain, Germany and Spain. Italy has already spent 2.5 billion euros on the F-35 program, and would lose the entire amount by pulling out now.

Another issue is Eurofighter’s operating cost, which Gen. Domenico Esposito, Director of Aeronautical Armaments at the ministry of defense, has estimated at €40,000 per flight hour. Italy’s leased F-16s, he said, cost less than $16,000 per flight hour to operate. Eurofighter disagrees with that figure, however, and using a much more restrictive definition of what constitutes direct operating costs it estimates that each flight hour costs €15,100.

Reducing number of F-35s is likely to be resisted by the Italian air force, which needs to replace its Tornado strike fighters and AMX attack fighters in the next decade and by the navy, which is determined to replace its AV-8B STOVL fighters and keep a fixed-wing combat component despite its being of dubious operational use. One source said the Navy could later buy F-35Bs off the shelf at much lower prices.

The F-35 program also is supported by Italian President Napoletano, who wields considerable influence even though his constitutional powers are very limited, and by Finmeccanica, the state-controlled industry group which owns Alenia Aermacchi, the lead Italian company on the F-35 program. However, Finmeccanica CEO Alessandro Pansa’s term expires in mid-April, and it is unlikely he will risk being replaced by opposing government policy. A round of nominations at many state-controlled industries is due to be announced April 19.

Some details of the new quantities may emerge after a March 19 meeting of the Supreme Defense Council called by President Giorgio Napolitano. The meeting is expected to decide a radical review of Italy’s defense with a view to substantially reducing the armed forces’ capabilities to defense missions only.

The meeting also is expected to decide whether to amend a law which currently gives Parliament a strong say over how defense budgets are spent, but which Napolitano believes infringes on executive powers. Known as Law 244, the text was used by Parliament last summer to forbid the government from buying any F-35 fighters without its approval, but which according to Italian press reports was immediately ignored by the previous government, which ordered 12 additional aircraft without any public announcement.

The debate about whether law exceeds Parliament’s constitutional powers in fact hides a long-running debate over the cost and necessity of the F-35 program, of which Italy is the second-largest foreign partner and in which it has already invested 2 billion euros.

As to Eurofighter Tranche 3B, Britain has implied that it will not fund it, and the German government in December told Parliament it would also not proceed, so the viability of Eurofighter option is far from being assured.

But F-35 costs are such that few believe Italy can afford them in its current financial straits. Also at issue is the fact that the Italian government has invested about $900 million to set up the F-35’s Final Assembly and Check-Out (FACO) facility at Cameri, near Novara. The Italian government has also contributed $1,028 million to the F-35’s development to date, and according to Gen. Esposito had spent a total of $2.5 billion on the program as of July 2013.

Esposito said in a July 2013 Q&A document released by the defense ministry that Italy is slated to spend another $16.1 billion on the F-35 program over the next 15 years, of which just over half to buy the aircraft. At the time, he said that it expected to buy 60 F-35A CTOL variants at an average unit cost of €74 million (then worth $97.7 million) and 30 F-35B STOVL variants at €88 million ($116.1 million) each – it is not clear whether these figures include the engines, which in the F-35 program are counted separately.